Each year in April, people start worrying about filing their taxes. Although some people might file taxes on their own, business owners or people with vital investments and assets need to use the services of expert tax preparers. As there are many types of taxes to file, there are different types of preparers for the same. It’s easy to find many types of tax planning and preparer services. There are CPAs, Enrolled Agents, Tax Attorneys, and others without any certificate.
Traits Of Skilled Tax Preparers
The preparer should be skilled in preparing taxes and should correctly file returns for taxes. People trust them with their info. They know about your income, your family members, your marriage, social security numbers, and all the details of your financial life.
Most preparers for tax returns also offer useful tax services. However, year after year, many taxpayers are financially hurt as they select the wrong preparer for tax returns. You should check the tips to select tax preparers and avoid any “ghost” tax preparers.
If you are looking for help in preparing and filing your tax returns for the season, you should select tax preparers whose certificate suits your needs. Otherwise, you might overpay for skills that you don’t need. Or else, you would conversely select an ineligible tax professional who can’t handle the changing tax situation.
Types Of Tax Preparers
Let’s look at a few types of tax preparers that perform different tax preparers responsibilities. All these offer the best possible help for filing and preparing taxes for a person or a company.
Enrolled Agents (EA)
Enrolled agents are the most respected and dependable people to ensure proper tax planning for firms. They must pass a difficult IRS exam and pass a BGC to get EA status. Further, they should also meet education qualifications.
EAs have practice rights, which means they can easily represent clients before any IRS department. They are the most accomplished tax-preparers in the market. They handle returns of any level and can also represent you if you’re facing collections from the auditing department.
The knowledge of EA is on par with a certified public accountant, but they charge very less. It makes them ideal professionals to invest in.
Tax attorneys practice tax laws with state licensing. Most states need an attorney to get a law degree and pass the test administered by the state bar association. People looking for law licenses should meet certain requirements. Most states require licensed attorneys to take continuing education courses to ensure they are informed of changes.
Also, attorneys have postgraduate law degrees called LLM or Legum Magister. It is a degree of choice for tax lawyers who want to pursue studies in certain law areas, like taxation. Tax attorneys can also apply their tax knowledge for:
- Tax planning
- Tax returns
- Providing client advice on long-range strategies to reduce taxes
Like EAs and CPAs, tax attorneys have the right to act on behalf of clients before the IRS.
Certified Public Accountants
People having complex tax problems should get help from CPAs. They are state-level certified. The main job of a CPA is handling accounts, but many CPAs are experts in making tax plans. These CPAs are great for people with difficult tax returns or people who wish to lessen their tax costs.
You can hire an EA and a CPA if you wish to have them for other tax planning services like making company reports. However, it would be wise to meet the CPA in person and confirm that they’re tax experts before hiring them to file complex returns.
Like EAs, CPAs have many rights to practice before the IRS.
An aspiring CPA must pass the Uniform Certified Public Accountant Examination. The American Institute of Certified Public Accountants (AICPA) conducts these exams for aspiring CPAs. Up to forty states need CPA candidates for passing an ethics exam.
After being licensed, a CPA should meet the requirements of the state to continue education. CPAs offer many services like:
- Analyzing financial statements
- Managing financial records
- Auditing services
- Making tax returns
Many CPAs also specialize in planning and estimating taxes. CPAs can represent their clients on different tax matters like:
- Collection and payment issues
- Tax audits
Annual Filing Season Program Participants (AFSP)
In the IRS annual filing season program, the participants should meet certain continuing-education requirements like the refresher course with a test to register each year. The tax preparers are roughly leveled with state-certified tax-preparers or perhaps above as they have stiff continuing education requirements. AFSP participants can only represent some clients, including those whose returns they prepared with customer service representatives and IRS auditors.
Non-Credentialed Tax Preparers
Non-credentialed tax preparers are people filing client tax returns without certifications from external organizations like AICPA, Bar Association, or IRS. It also includes seasonal tax preparers working as volunteers in the IRS Volunteer Income Tax Assistance Program.
The IRS also has a learning program for non-credentialed tax preparers, i.e., the Annual Filing Season Program (AFSP). People participating in eighteen hours of education, including a six-hour refresher federal tax law course, get an IRS completion certificate.
In ten states, people can work with non-credentialed tax preparers for tax education courses before they register as tax preparers with the state. But in other forty states, non-credentialed tax preparers don’t have to get any certificate.
Things To Know Before Hiring Tax Professionals
Most tax return preparers offer great services and fulfill all tax preparers’ responsibilities to file tax returns. However, with the wrong selection, you can lose rather than save. Asking these tax preparer questions for clients would help you choose the right tax preparers for filing your tax returns.
What Type Of Tax Filer Should I Go For?
People can be paid tax return preparers with an IRS Preparer Tax Identification Number (PTIN). However, all tax return filers have different education and skills.
How To Check On A Tax Preparer’s Credentials?
You can look for the IRS Directory of Federal Tax Return Preparers with Certificates and Qualifications. You can also check their qualifications and credentials. It helps you find the right tax preparers in the area with IRS-recognized qualifications. People also get the Annual Filing Season Program Completion Record. Also, you can check the professional organizations from which the tax preparers belong.
What To Do If You Have A Tax Preparers-Related Issue?
Many instances have been there of tax preparers’ fraud. You can check the IRS rules to avoid fraud from tax preparers. It is about finding fake tax return preparers.
You can complain if you are impacted financially by the misconduct of a tax return preparer and their wrong practices.
After you’ve got answers to these tax preparer questions for clients, you can check the Tax Preparer Directory of IRS to look for a tax filer in that area. The directory also lists experts with active certifications.
It doesn’t offer their contact info. To contact, you’ll have to turn to the state’s board of accountancy (for CPAs) or CPA society, the NAEA (for Enrolled Agents), etc.
Before you hire a tax return filer, always carry a BGC. Check with different organizations like the Better Business Bureau, the state bar association for attorneys, or the state CPA board. Make a list of the best tax filers and know whether they are CPAs or all-rounder tax experts. You would need someone who has tax laws at their fingertips. You should be sure that the tax expert will file your returns according to the federal tax rules and state laws.
Find out whether your tax preparers are enrolled agents, certified public accountants, or tax attorneys or not. Only CPAs, EAs, and attorneys can represent tax filers before the IRS. HRMB Associates LLC is a team of well-trained CPAs, Attorneys, and tax experts who file and represent taxes on your behalf. Regardless of the type and scale of business you manage, you can count on us for your tax problems. Consult our special agents to get help with everything tax-related.